Do We Have eBay to Thank for All That Counterfeit Wine?

Billionaires getting swindled by fake bottles of wine purportedly belonging to Thomas Jefferson aside, as the world's greatest wines continue to climb in price, wine fraud continues to increase in frequency and in value.

At this point, the fakery of wines has become a big business. No one knows just how large, but some wine experts say the real figure is probably shudderingly large: millions of dollars worth, to be sure, and perhaps even tens of millions. Wine Critic Allen Meadows told writer Michael Steinberger that he believes perhaps 10% of the pre-1960 wines he comes across these days might be fakes.

A bottle of 1994 Grace Family Vineyards Cabernet, a bottle 1995 Tignanello Red Blend from Tuscany, and a bottle of 1996 Screaming Eagle, all empty, of course.

Together they may sell for between $10 and $60 on eBay. Filled up again with some red wine, re-corked and re-foiled, these three wines would sell for a total of about $2224 according to WinePrices.Com.

And that, of course, is the problem.

As mentioned last week in the New York Times Freakonomics blog, a recent paper by a member the American Association of Wine Economists (see the PDF abstract) suggests that online auction sites like eBay may be significantly contributing to the problem of counterfeit wine.

The logic presented in the paper is quite simple: after watching a bunch of sites like eBay, it's quite clear that the sale price of empty bottles directly correlates to the price of that bottle were it to actually be full. In short, those willing to pay $100 for an empty bottle of Petrus must be getting some value from the bottle that is completely out of whack with its real value in the marketplace (as a glass container with a paper label on it).

While eBay certainly can't be held responsible for people doing illegal things with innocuous items that they buy perfectly legally online, I wonder whether it might be in everyone's interest for them to prevent people from selling bottles that are particularly prone to counterfeiting.

This wouldn't be easy, of course, and may be unreasonable to ask, but they've got a lot of controls in place already to make sure that people don't break the law in a million other different ways (like, for instance, selling dangerous chemicals online). How hard would it be for them to pay a little more attention to the empty bottle problem? It certainly would be good for the wine world.

If you aren't yet aware of the fact that fake wine is a big deal, you will be soon. It's coming to a theater near you.\n\nBillionaires getting swindled by fake bottles of wine purportedly belonging to Thomas Jefferson aside, as the world's greatest wines continue to climb in price, wine fraud continues to increase in frequency and in value.\n\nAt this point, the fakery of wines has become a big business. No one knows just how large, but some wine experts say the real figure is probably shudderingly large: millions of dollars worth, to be sure, and perhaps even tens of millions. Wine Critic Allen Meadows told writer Michael Steinberger that he believes perhaps 10% of the pre-1960 wines he comes across these days might be fakes.\n\nAnd it all may be due, in part, to things like this:\n\n3 x RED WINE BOTTLE LABEL SCREAMING EAGLE GRACE ..Empty\n\nA bottle of 1994 Grace Family Vineyards Cabernet, a bottle 1995 Tignanello Red Blend from Tuscany, and a bottle of 1996 Screaming Eagle, all empty, of course.\n\nTogether they may sell for between \$10 and \$60 on eBay. Filled up again with some red wine, re-corked and re-foiled, these three wines would sell for a total of about \$2224 according to WinePrices.Com.\n\nAnd that, of course, is the problem.\n\nAs mentioned last week in the New York Times Freakonomics blog, a recent paper by a member the American Association of Wine Economists (see the PDF abstract) suggests that online auction sites like eBay may be significantly contributing to the problem of counterfeit wine.\n\nThe logic presented in the paper is quite simple: after watching a bunch of sites like eBay, it's quite clear that the sale price of empty bottles directly correlates to the price of that bottle were it to actually be full. In short, those willing to pay \$100 for an empty bottle of Petrus must be getting some value from the bottle that is completely out of whack with its real value in the marketplace (as a glass container with a paper label on it). \n\nWhile eBay certainly can't be held responsible for people doing illegal things with innocuous items that they buy perfectly legally online, I wonder whether it might be in everyone's interest for them to prevent people from selling bottles that are particularly prone to counterfeiting.\n\nThis wouldn't be easy, of course, and may be unreasonable to ask, but they've got a lot of controls in place already to make sure that people don't break the law in a million other different ways (like, for instance, selling dangerous chemicals online). How hard would it be for them to pay a little more attention to the empty bottle problem? It certainly would be good for the wine world.